Tariff Impact Forecast
J.D. Power tries to foresee how duties will affect vehicle prices, sales.

Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models, J.D. Power predicts.
Pexels/Adrian Gambet
With the obvious caveat that the U.S. economy is challenging to predict right now, a new forecast at least tries to pin down what the auto industry could expect as the rest of the year unfolds.
The J.D. Power look ahead, while acknowledging the undeniable impact of current and impending U.S. trade tariffs on automakers, expects that brands won’t pass on the full cost to consumers since doing so would cut sales.
“In order to maintain reasonable volumes, a large portion of tariffs must be absorbed,” said J.D. Power President of Data and Analytics and Chief Product Officer Thomas King in the forecast.
With those qualifications, it forecasts new-vehicle price increases starting in the late spring and settling at an average of about 5% by the fourth quarter in what J.D. Power calls a “new normal.” That would translate to an average of $2,300 per vehicle, despite current tariff exposure for U.S. retail auto sales equating to an average of $4,782 per vehicle.
The price increases would in turn result in reduced sales for an 8% drop in annualized retail deliveries, or 1.1 million units, J.D. Power expects. Depending on how tariff policy plays out, though, it said the decrease could be as low as 5% or as high as 12%, not taking any larger economic factors into account.
Tariff effects would also be spotty due to automakers’ varying degrees of exposure based on the volume of vehicles and/or auto parts they import, the data provider pointed out. The tariffs could thereby bring different effects even within an individual brand’s lineup.
Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models. They could move supply to markets less exposed to tariffs and increase domestic production, along with retooling parts sourcing, J.D. Power said.
Originally posted on F&I and Showroom
More Industry

Pennsylvania Dealership Under New Retailers
The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.
Read More →
Battery Storage Takes Priority Over EVs
U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
New-Vehicle Sales Picture Relative
A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.
Read More →
Auto Group Acquires Third Nissan Rooftop
Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Building an Extraordinary F&I Agency
Work to determine your specialized talent, because that fact will determine everything about your agency’s future.
Read More →
Recipe for Compliance
The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.
Read More →
EVs Getting More Attractive
A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.
Read More →
EV Sales Drop in April Following Surge
North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.
Read More →